A Globe of Witnesses      
AGW Welcome The Witness Magazine

 

South Africa Revisited — Grassroots Nation-Building in the Works
by Timothy H. Smith

Donna Katzin, executive director of Shared Interest, addresses a workshop at the World Conference Against Racism.

Micro-enterprise business in the Cape Flats: Ranjit Mathews admires the work of local artisans at the Khayelitsha Craft Market.

The issue of South Africa in the late 1960s marked the beginning of Tim Smith’s legendary work in corporate responsibility. As Executive Director of the Interfaith Center on Corporate Responsibility, he played a key role in the anti-apartheid movement for 30 years, for example, by participating in the first stockholders meetings where resolutions challenging South Africa were raised. This article documents his return to South Africa after a 30-year hiatus.

South Africa was front-page news in August and early September as debate about the World Conference Against Racism (WCAR) hosted in Durban swirled in the press. I serve on the board of Shared Interest (SI), a U.S.-based guarantee fund supporting loans for South Africa. Just before the WCAR, a SI delegation traveled to South Africa to witness the results of its work. We traveled to six of South Africa’s nine provinces and visited over a dozen projects ranging from housing and farming to micro-lending for craft cooperatives. The experience was extremely powerful.

Desmond Tutu reminded us… that apartheid is like a giant building surrounded by a scaffold. When the apartheid laws were abolished and democracy came to South Africa, the scaffold was thrown into history’s trash heap. But the building, representing the old economic structure, remains virtually intact.

First, some context. South Africa emerged from decades of apartheid less then 10 years ago. The new democratic government of 1994 led by Nelson Mandela represented the hopes of millions of previously disenfranchised South Africans for a better life. The new leaders carried the burden of expectations that they would deliver very quickly. Yet the legacy of apartheid is not one that can be eradicated in one short decade. Retired Archbishop Desmond Tutu reminded us when we met with him during our trip that apartheid is like a giant building surrounded by a scaffold. When the apartheid laws were abolished and democracy came to South Africa, the scaffold was thrown into history’s trash heap. But the building, representing the old economic structure, remains virtually intact.

While doors are open for blacks to move into jobs from which they were previously blocked, the capital in the private sector is still very much in traditional white hands. Thus the earlier dramatic struggle against the apartheid system has to be replaced by the less dramatic but no less important work of economic empowerment, job creation, housing construction, and providing services for the black community. In short — nation building. This is a vitally important priority for South Africa.

It is one thing to read reports enthusiastically describing development work and it is another to taste, feel, and touch that work. Bushbuckridge is in the Northern Province of South Africa in an area where there is 70 percent unemployment. As our vehicle turned the corner to the "New Forest" farming project, scores of women streamed out to greet us in song and dance. Shared Interest is the guarantor of a loan to this project. In six months, 16 large "houses" built of plastic mesh suspended on tall poles were constructed to protect the tomato and pepper crops from the brutal sun, rain and hail the size of golf balls. Crops were coming in by the ton and vibrant colors and vegetable scents filled the air as 65 women harvested. This produce would then be shipped and sold, bringing sorely needed income to the community. When the loan is paid off, these women will own their farms and a new stage of expansion is possible.

Decent housing is a priority for the Government but it is a task that it cannot do alone. Sadly the South African banking sector, using its own form of "redlining," is virtually absent from lending activity to low-income housing projects.

In the Free State, south of Johannesburg, and in the Cape Flats outside Cape Town, we visited projects providing decent housing for blacks who had previously lived in houses they called "shacks." The urgency of providing decent housing was underlined by the Minister of Housing with whom we met. She noted that each year 200,000 families are added to the country’s homeless population. "If we don’t make a dent in this backlog," she said, "we’ll create a situation no one will be able to manage." Decent housing is a priority for the Government but it is a task that it cannot do alone. Sadly the South African banking sector, using its own form of "redlining," is virtually absent from lending activity to low-income housing projects. Guarantees of a few million dollars can provide a safety net allowing a bank to make a loan with minimal risk which then can be leveraged to tens of millions of dollars in new housing.

All these projects reflect the convictions of U.S. investors, a number of them Walden Asset Management clients, who have invested their dollars in SI to help build a more just South Africa. For close to 30 years, United States Trust Company of Boston (USTC) and Walden have been deeply involved in SI’s work, as a financial contributor and through the leadership of USTC’s former senior executive Robert Zevin, a former chair of SI. Walden’s clients have also supported SI, having invested over $500,000 through Walden’s Community Development Investment Service. South Africa has a long way to go to even come close to its goal of economic justice for all. Certainly social investors, who fought against apartheid, can help make a dent.

Personal Reflections on the Human Spirit

I had not been in South Africa since I was there 30 years ago doing research on the role of U.S. banks and corporations in supporting apartheid. Soon after our research was published and used in anti-apartheid campaigns, the South African government wrote a letter telling me I was no longer welcome to travel there. Visiting a post-apartheid, democratic South Africa this year was a profound experience. Much has changed politically, but much is the same, and new threats such as the AIDS epidemic abound.

One symbol of the change was our trip to Robben Island, the infamous prison where Nelson Mandela and a number of South Africa’s political leaders were imprisoned for almost 19 years. They then continued their sentences on the mainland for another decade until released. The tiny barren prison cell, courtyard and rock quarry where Mandela spent his years were grim and depressing reminders to our American team. Ahmed Kathrada, who was imprisoned for 26 years along with Mandela, led our visit. He explained, "While we will not forget the brutality of apartheid, we will not want Robben Island to be a monument of our hardship and suffering. We would want it to be a triumph of the human spirit… a triumph of wisdom and largeness of spirit against small minds and pettiness; a triumph of courage and determination over human frailty and weakness; a triumph of the new South Africa over the old."

What a poignant reminder that the human spirit can overcome. What an inspiration to help move on to the new challenges of nation building. We all want to see South Africa succeed in its valiant attempt to create a multiracial democracy with economic opportunity for all. The reports from Zimbabwe about acts of retribution against white farmers are a chilling example of how racial politics can play out with such a negative impact. South Africa’s vision and stated commitment to basic rights as enshrined in its constitution (e.g. housing, health care, and education) are a vision Walden and our clients want to help make a reality. Investments in SI help make it so.

 

Tim Smith is a Senior Vice President at U.S. Trust in Boston, and serves as Director of Socially Responsive Investing for its Walden Asset Management program. Previously, he was Executive Director of the Interfaith Center on Corporate Responsibility for 30 years, since its inception. Under his leadership, ICCR became one of the primary social leaders to challenge banks and corporate ties to apartheid, contributing to the economic isolation of South Africa, which was essential in bringing the apartheid government to the negotiating table. Tim continues his support for South Africa by serving on Shared Interest’s board. Tim can be reached by email at tsmith@ustrustboston.com